Last week's decision by the Metro board to defer a fare increase scheduled for January is a gamble designed to stem an alarming loss in ridership. But, even if it works, its likely immediate effect will be to make Metro more dependent than ever on government subsidies.
The deferral comes as budget analysts for area governments are getting a first look at Metro's proposals for fiscal 1984 spending and seeing more bad news: costs up 15 percent or more; subsidies up at least25 percent.
So, once again, Metro and the eight local jurisdictions it serves are grappling with questions that return at budget season each year but are never quite answered: How can costs be prevented from rising so quickly? How can subsidies be controlled? What is a reasonable fare for riding the buses and trains?
Metro is a sometimes fragile coalition linking eight local jurisdictions, the states of Virginia and Maryland, and the federal government. Their inability to work out common answers to these questions is one of the regional transit system's greatest weaknesses.
On the face of it, last week's decision flies in the face of a goal that almost everyone shares: keeping subsidies down. But the board hopes that this will help retain patronage while new reliability programs get underway to reduce the rash of rush-hour breakdowns, which have been blamed for much of the loss in ridership.
The rail system now is averaging about 300,00 rides a day, or some 30,000 below projections.
Without riders, there is little point in running transit. Ultimately, the fare decision will strengthen Metro's financial health, the reasoning goes.
But for the short term at least, Metro's ability to pay for itself seems certain to be further eroded. State and local governments probably will have to pick up an additional $650,000 per month that the fare increase had been expected to generate.
They already are paying a total of about $13.5 million per month to keep the system going.
What brought Metro to this point? Basically, the answer is soaring costs, which have risen 79 percent since 1979. About two-thirds of Metro's current $339 million operating budget is eaten up by wages and benefits.
The contract with the Amalgamated Transit Union, which represents most of the employes, provides a quarterly adjustment covering the full amount of the rise in the consumer price index. Costs of benefits also tend to rise at the inflation rate or ahead of it.
Cost increases further have been driven by the need for large purchases of energy-related products, such as diesel fuel, which have risen much faster than the general rate of inflation. Payments on bonds that financed early Metrorail construction have come due in recent years, and workers' compensation costs also have risen.
Cost-per-mile figures -- the average cost of running a mile of service -- show that rail has outpaced the consumer price index consistently in recent years, as millions of dollars were channeled into maintenance, track replacement and other high-cost items.
The bus system, in contrast, has tracked the index fairly closely, since it has been forced to operate the same number of miles with fewer buses and a decreasing staff.
For 1984, the upward march will continue. Metro staff members have devised two preliminary budget proposals for the year. One would raise costs by $50 million to $389 million, an increase of 15 percent. The second, designed to give more attention to repairs, would increase total costs $65 million, or19 percent, to $404 million.
About $33 million of the rise in both versions would be for inflation in wages, fuel prices and other items. An expected rise in workers' compensation payouts and some modest maintenance programs also would increase costs. The remaining markup largely would be the expense of opening the Yellow Line between Gallery Place and National Airport, and extending the Blue Line past National Airport to Huntington.
It is a fact of life for Metro that larger service equals larger deficits. "The further out the segments go, the more they cost to operate," says D.C. Transportation Director Thomas Downs.
Losses could be reduced somewhat if all parallel bus services were discontinued when new rail segments opened. But civic groups, often supported by board members, fight to save local bus service and often succeed.
Instead of one full train, a half-full train and a half-full bus run the same route at twice the cost. Connecticut Avenue buses, for example, were fought over when the Red Line opened as far as Van Ness, and many were kept running; the same battle to keep buses crossing the 14th Street bridge is certain to erupt after the Blue/Yellow extension.
Thus, costs are growing. But, over the years, riders largely have been shielded from much of these increases.
There is wide divergence among area governments as to the proper ratio of fares to subsidies. Opinion on the board ranges from the District's Hilda Mason, who argues for free rides, to Dorothy Grotos of Virginia, who consistently has tried to raise fares instead of subsidies.
But given the fact that supporting higher fares is an unpopular stance for elected officials, the net result of the wrangling has been a steady shift toward greater reliance on subsidies.
As a result, Metro's ability to pay for itself has dwindled to the point where fares are supposed to cover about 48 percent of the costs in this fiscal year, while just two years ago the figure was 52 percent. The 1984 numbers being discussed would push fares' role down to 42 or 43 cents on the dollar.
Someone, of course, must make up the rest. That someone is the taxpayer.
Subsidies have soared since 1973, when Metro first started service by running four bus companies it had taken over.
This year, subsidies are projected to reach $177 million. The 1984 estimates would increase that figure to $221 million in the less ambitious budget and $235 million in the fancier one.
Subsidies now flow into Metro's bank accounts from a potpourri of state, local and federal funding programs.
Bit by bit, local and state governments have assumed more of the share from the federal government. Their burden will grow further if the Reagan administration gets its way and wins from Congress large reductions in federal aid, which last year covered about 8 percent of operating costs.
None of this is news at Metro. The budget deliberations of last year featured much hand-wringing over where it all would end. Officials fretted over projections showing local governments' share of the subsidies would reach $287 million by 1987, a burden everyone agreed could not be borne.
In the past two years, as a congressional precondition to collecting $1.7 billion in federal subway construction funds, area governments have passed a series of tax measures designed to assure that operating subsidies will be available. The District, at its end, has reserved taxes that are supposed to cover 100 percent of its subsidies. But at the other end, Virginia's measures will cover only a portion and will force governments there to go deeper into their general funds each year.
To address similar problems, other cities have enacted inflation-sensitive regionwide taxes on sales or payrolls, with revenues dedicated to transit. Last year, such a tax was . . . this fiscal year fares are supposed to cover about 48 percent of costs, while just two years ago the figure was 52 percent. proposed here. But, due to coming elections and major philosophical disagreements among local governments, the idea did not get far.
In the end, the governments got down to the politically less complicated task of paring General Manager Richard Page's draft budget. That is likely to be their approach this year, too.
"The key right now is trying to find some way to cut additional growth in costs," says Larry Saben of the Maryland Department of Transportation.
Metro officials argue that the really large budget items, especially wages and benefits, are largely beyond their control because of the contract's cost-of-living clauses. They see little chance that the union would agree to drop these when its contract is renegotiated next year. The 1984 budget estimates, in fact, assume that the escalator clauses will remain.
Area jurisdictions have raised serious questions about productivity: whether Metro is overstaffed and its employes underworked. But other than ordering management programs to reduce absenteeism, jurisdictions have found few, if any, successful ways to cope with the problem.
Similarly, fuel, power and benefits are seen as out of Metro's hands for the most part.
Last year, Page tried to slip extras into the budget aimed at improving maintenance and service, in the belief that you have to spend money to make money. Unable to tackle the big-line items, the jurisdictions picked at many of these when they made the cuts. They took away money for marketing and for extra buses, moved to keep vacant jobs open longer to save money on wages, and called for increased productivity.
This year, the board is firmly on record as favoring extra spending to improve reliability. But when the 1984 budget is put to bed next spring, members may have second thoughts after they see what the size of their governments' bills actually will be.
Fairfax County officials, for example, complain that they are trying to hold the 1984 increase in their county budget to 6 percent. But the estimates show that, in 1984, subsidies for service to Fairfax riders would race ahead by more than 22 percent.
Numbers such as this lead Page to argue that area governments must resume their search for an areawide tax. Yet this seems as far away as ever.
The Washington area has some of the country's wealthiest local governments. Despite their cries of alarm, however, they apparently feel that the problem has not yet reached the point where they must act forcefully to put aside their differences and control the costs of Metro.